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China's Consumer, Producer Inflation Pick Up on Upstream Cost Pressures
China's consumer and producer prices strengthened in August, signaling firmer price pressures as higher commodity and input costs fed through the industrial sector.The consumer price index rose 0.8% year over year in August, according to data from the National Bureau of Statistics on Wednesday. The reading matched the 0.8% consensus forecast tracked by Investing.com and picked up from 0.5% in July.The CPI rose 0.4% month over month, rebounding after three consecutive months of declines and suggesting a firmer near-term price trend.The recovery, however, remained uneven. Food prices fell 1.4% year over year, while non-food prices rose 1.2%. Consumer goods prices increased 0.8%, matching the rise in services prices.Core inflation, which excludes food and energy, rose 1% year over year, pointing to somewhat firmer underlying price pressures than the headline CPI suggests.Producer prices delivered a stronger signal. The PPI rose 3.8% year over year in August, recovering from a three-month low of 3.5% in July and exceeding the 3.6% consensus forecast tracked by Investing.com.On a month-over-month basis, the PPI rose 0.4%, reversing two consecutive months of declines.The rebound was led by production inputs, with prices of means of production rising 5% year over year. Mining prices jumped 17.8%, while raw-material prices rose 6.7%.Higher commodity and industrial input costs remained a key source of pressure. Prices of non-ferrous metal materials and wires surged 19.8% year over year, while fuel and power prices rose 9.8% and chemical raw-material prices increased 9.5%.Taken together, the data suggest China's price environment is becoming firmer, although the recovery remains uneven.For the first eight months, consumer prices averaged 0.9% higher than a year earlier, compared with a 2% increase in producer prices.
Shanghai Composite^SZSE
